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Cheqout Pty Limited (“Cheqout”) filed an Application on 2 June 2009 to register the Mark “superman workout” in relation to “conducting exercise classes; fitness and exercise clinics, clubs and salons; health club services (exercise)” in Class 41. DC Comics, the owner of the Superman superhero franchise, opposed the Application. As the Opponent to the registration of the trade mark, DC Comics bore the onus of establishing a ground of opposition on the ordinary balance of probabilities.

However, having failed in the opposition, (DC Comics v Cheqout Pty Ltd [2012] ATMO 64), DC Comics appealed to the Federal Court of Australia pursuing the grounds of Sections 43, 60 and 62A of the Trade Marks Act 1995 (Cth) (“the Act”). However, unable to demonstrate the possibility of deception or confusion arising in respect of Cheqout’s claimed Services, DC Comics failed on the grounds of Sections 43 and 60. However, DC Comics was successful in respect of Section 62A relating to bad faith.

Section 62A provides that:

The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

Cheqout had used its mark “superman workout” together with a “BG” Shield Device (“the BG Shield Device”), as depicted below, in relation to its personal training, film and entertainment services, and in titles on video clips appearing on its website.

The triangular shape of the BG Shield Device is of a similar shape and style of lettering to the S Shield Device in DC Comics’ trade marks. This can clearly be seen by a side-by-side comparison of the two devices:

DC Comics had submitted that the use of the Mark together with the BG Shield Device depicted above which, it contended, mimicked the S Shield Device, demonstrated that the application for the Trade Mark was made in bad faith.

In the Appeal Proceedings, Justice Bennett found that there was no dispute that Superman, his strength and the indicia with which he is associated, including the S Shield Device, were very well known. There was no dispute that DC Comics had licensed the use of its registered Superman character and shield marks in Australia in relation to an array of goods, but had not licensed the use of these marks with respect to gyms or personal training.

Although the evidence as to the use of the BG Shield Device as at the Priority Date of 2 June 2009 was unclear, what was clear was that Cheqout’s website had displayed the BG Shield Device on 15 December 2009. It was also acknowledged that Cheqout only removed the BG Shield Device after receipt of a “cease and desist” letter sent on behalf of DC Comics on 17 December 2009.

In evidence adduced before the Registrar, the Director of Cheqout had stated in his Statutory Declaration that the use of the words “superman workout” was designed to:

“… convey to potential users of my exercise program the potential of changing yourself into a muscularly powerful athletic superman … not to associate my exercise program with the Opponent’s comic book character.”

However, it was held that the Director’s assertion was at odds with the use of the BG Shield Device, to which the evidence did not refer. Furthermore, the inference was clear, from the use of the Mark together with the BG Shield Device that, in making the application to register the Mark, the Director (and therefore Cheqout) intended to use it in combination with the BG Shield Device in order to strengthen the allusion to the Superman character. It was determined that inference could also be drawn that such use was designed to gain a benefit by appropriating Superman indicia and the reputation of the DC Comics superhero, so as to further the association between the Mark and the superman word mark.

These facts were considered to be a “relevant circumstance” in bad faith considerations for the purposes of Section 62A.

Her Honour also considered that section 62A does not require the Opponent to establish that the use of the Trade Mark would result in deception or confusion. She further stated that the Evidence that use of the Mark is likely to cause confusion or deception may be persuasive in considering whether the application to register a mark was in bad faith, but that it is neither determinative of that finding, nor a prerequisite for it.

Justice Bennett ultimately found that DC Comics had established that Cheqout applied to register the Mark in bad faith. This was evidenced by the use, soon after the application, of the word “superman” together with the BG Shield Device, in the context of male fitness and strength. Her Honour noted also that the red, white and blue colours traditionally used in conjunction with the Superman character were used by Cheqout together with the BG Shield Device. The design of the BG Shield Device closely resembled the insignia associated with the DC Comics’ character and the DC Comics’ registered trade marks. Her Honour was satisfied that at the date of application for the Trade Mark, Cheqout’s conduct fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons.

Her Honour concluded that DC Comics had discharged its onus of proof with respect to the ground of opposition provided for in section 62A of the Act and therefore the Application to register the Trade Mark was refused.

The take-home lesson from this case is that the ground of “bad faith” under section 62A can be used to oppose the registration of a Mark, without the need to adduce evidence of deception or confusion.

Compare jurisdictions:Litigation: Enforcement of Foreign Judgments

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